Sportking Q2 EBITDA margin reaches 19.8% as sales rise

Sportking India Ltd reported a Q2 FY27 earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 19.8%, compared with 10.4% a year earlier, as revenue from operations rose 24.5% to Rs 781.1 crore. Gross profit increased 64.7% to Rs 249.2 crore and gross margin expanded 779 basis points to 31.9%.

Why did Sportking's Q2 FY27 margin increase?

Sportking's Q2 FY27 margin increased because gross profit grew faster than revenue. Revenue from operations increased by Rs 153.7 crore from Rs 627.4 crore in Q2 FY26, while gross profit rose by Rs 97.9 crore from Rs 151.3 crore. Gross profit margin consequently rose to 31.9% from 24.1%, according to the presentation.

Raw-material cost rose to Rs 493.3 crore from Rs 438.2 crore, while power and fuel cost fell to Rs 38.5 crore from Rs 43.6 crore. Employee cost increased to Rs 38.3 crore from Rs 34.3 crore and other expenses rose to Rs 56 crore from Rs 51.6 crore. EBITDA nevertheless increased 136.8% to Rs 154.9 crore from Rs 65.4 crore, lifting the EBITDA margin by 940 basis points.

There were no exceptional items in either Q2 FY27 or Q2 FY26. Profit before tax rose to Rs 129.7 crore from Rs 37.6 crore, while profit after tax increased 240.9% to Rs 96.4 crore from Rs 28.3 crore. The profit-after-tax margin rose to 12.3% from 4.5%.

How did Sportking's Q2 FY27 results compare with prior periods?

Sportking's Q2 FY27 revenue, EBITDA and profit after tax were above both Q1 FY27 and Q2 FY26 levels. Revenue rose 11.0% quarter on quarter from Rs 703.7 crore in Q1 FY27 and 24.5% year on year from Rs 627.4 crore. EBITDA increased from Rs 132.2 crore in Q1 FY27 and Rs 65.4 crore in Q2 FY26.

EBITDA margin rose to 19.8% from 18.8% in Q1 FY27, but gross profit margin declined by 49 basis points from 32.4%. Profit before tax still rose 26.9% quarter on quarter to Rs 129.7 crore, as depreciation declined to Rs 13.9 crore from Rs 23.6 crore. Other income fell to Rs 0.8 crore from Rs 2.3 crore, while finance cost increased to Rs 12.1 crore from Rs 8.7 crore.

What did volumes and geographic mix contribute to Sportking's Q2 revenue?

Sportking's production returned to its Q2 FY26 level and yarn sales exceeded the comparable-quarter volume in Q2 FY27. Production was 21.3 thousand metric tonnes, matching Q2 FY26 and rising from 20.1 thousand metric tonnes in Q1 FY27. Yarn sales were 21.2 thousand metric tonnes, compared with 20.9 thousand metric tonnes a year earlier and 20.5 thousand metric tonnes in Q1 FY27.

Capacity utilisation was 96% in every quarter from Q2 FY26 through Q2 FY27. The presentation therefore shows higher Q2 FY27 revenue at an unchanged utilisation rate, but it does not disclose realised yarn prices or a product-wise sales breakdown that would separate price and volume effects on the 24.5% revenue increase.

Domestic contribution was Rs 399 crore in Q2 FY27, or 52% of geographic revenue contribution, compared with Rs 296 crore and 47% in Q2 FY26. Export contribution was Rs 365 crore, or 48%, compared with Rs 334 crore and 53% a year earlier. Domestic contribution increased by Rs 103 crore, compared with a Rs 31 crore increase in export contribution.

What do Sportking's first-half results and cash flow show?

Sportking reported first-half (H1) FY27 revenue from operations of Rs 1,484.7 crore and EBITDA of Rs 287.1 crore. Revenue increased 22.4% from Rs 1,213.2 crore in H1 FY26, while EBITDA rose 112.8% from Rs 134.9 crore. The H1 EBITDA margin was 19.3%, compared with 11.1% a year earlier.

H1 gross profit rose 55.2% to Rs 477.2 crore from Rs 307.4 crore, and gross profit margin increased to 32.1% from 25.3%. Profit after tax reached Rs 172.3 crore, up 176.3% from Rs 62.4 crore, with the margin rising to 11.6% from 5.1%.

Net cash from operating activities was Rs 218.7 crore for the period ended September 2026, compared with Rs 158.5 crore for the period ended September 2025. Cash generated from operations was Rs 255.9 crore after a Rs 51.7 crore working-capital outflow, versus Rs 190.6 crore after a Rs 28.7 crore working-capital inflow in the comparable period. Investing cash flow was an outflow of Rs 206.8 crore, and cash and cash equivalents ended at Rs 52.1 crore.

How is Sportking funding its Odisha capacity expansion?

Sportking has announced a first-phase Odisha greenfield project of 1.50 lakh spindles, with an approximate Rs 1,000 crore outlay. Management says the project will be funded through a mix of term loans and internal accruals. The planned addition is approximately 40% of the existing 3.79 lakh spindle count.

Management says the Odisha location is intended to improve service to eastern India and diversify the company's geographic presence. The presentation says operations are to commence from the third quarter of FY27, while a separate capacity slide says the capital-expenditure programme is expected to take 12 to 15 months to complete. That slide shows capacity of about 5.30 lakh spindles in 2027 after the 1.50 lakh-spindle addition.

Total borrowings were Rs 545.2 crore at September 2026, comprising Rs 294.9 crore of non-current borrowings and Rs 250.3 crore of current borrowings. Current borrowings were Rs 167.4 crore at March 2026, while capital work-in-progress increased to Rs 117.7 crore from Rs 14.7 crore. The presentation does not provide a project-specific breakdown of this spending or borrowing movement.

Conclusion

Sportking's Q2 FY27 result combined 24.5% revenue growth with a substantial improvement in profitability. Gross margin rose 779 basis points to 31.9%, EBITDA margin increased 940 basis points to 19.8%, and profit after tax reached Rs 96.4 crore. Production was unchanged year on year at 21.3 thousand metric tonnes, while domestic contribution rose to 52% of the geographic mix.

The next disclosed milestone is the Odisha project, which management says will add 1.50 lakh spindles with an approximate Rs 1,000 crore outlay and commence operations from Q3 FY27. The presentation also gives a 12-to-15-month completion period, making project execution, utilisation, working-capital movements and borrowings relevant measures to watch as the expansion advances.